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More than a 100 NZ Post staff in Wellington have today been told their jobs are going.
The changes, subject to consultation with affected staff, will lead to the closure of the Petone call centre, costing at least 44 jobs.
Some may be able to relocate to Christchurch, where 30 jobs will be created.
However, the union representing staff said that was not realistic for ordinary working people.
The biggest hit will be to back office staff and head office managers where 70 jobs will go, mostly in Wellington.
The cuts are the first significant step in a major restructuring the state-owned company said could affect up to 2000 positions over time.
It has blamed big falls in its traditional mail delivery volumes.
Chairman Sir Michael Cullen told a select committee this month that the decline in letter volumes was running at about 8 per cent a year.
NZ Post is also planning to cut six-days-a-week delivery in urban centres to three days a week.
A NZ Post spokesman said today's announcements to staff "reflect the harsh reality faced by NZ Post".
"We announced in November last year that we had to lower costs because of the rapid ongoing reduction in mail volumes, and that there would be job losses across the business.
"This is part of that process, and the first jobs affected will be in our corporate finance team, mainly in Wellington.
"The proposal outlined to staff today will reduce duplication and share support services across the business."
The decision to close the Wellington contact centre in Petone was about consolidating customer service centres to operate out of two sites, not three, he said.
The Engineering, Printing and Manufacturing Union (EPMU) said it was disappointed NZ Post had decided to close its Wellington contact centre in Te Puni, Petone.
"This will result in the loss of a further 47 jobs," EPMU national industry organiser for communications, Joe Gallagher, said.
Staff had been told and were "devastated" by the news.
"These people are devastated. They're destroyed, they're in tears," Gallagher said.
"Given that NZ Post is a state-owned enterprise is has to consider the public good in its decision, and we're not convinced they've considered all options," Gallagher said in a statement.
"It is our understanding that no thought has been given to reviewing their entire Wellington operation.
"There are two other call centres operating out of the capital and we are concerned that no consultation has taken place with the key stakeholders within the local economy."
The company's offer to relocate people to Auckland and Christchurch was unrealistic, he said.
- Fairfax Media